How you can get insured in your golden years of retirement

Improvement in medical facilities and the resultant increase in life expectancy has led to people living additional years as retirees. After a lifetime of hard work, the years between 60 and 80 are considered to be the most relaxing and enriching years. Often called the golden years of retirement, people are generally free of responsibilities and tend to live a fulfilling life. Contrary to popular perception, money is rarely the reason for retirement joy but the lack of it often leads to financial stress.

Long life comes with its own set of problems. Medical emergencies are common and the body requires regular check-ups. Living without health insurance is akin to financial suicide. Some people work in private companies even after the age of 60, they are likely to have group insurance cover provided by the employer. However, the majority choose not to work. While many aged people have health cover, many choose to retire without a policy. The golden years can turn to a harrowing experience without insurance. Here is how to get insured in the golden years of retirement the points to focus on.

1) Health Insurance

At the outset, it must be made clear that getting a health insurance policy for senior citizens will be extremely expensive. Even then, it is advisable to take a policy as it tends to save a lot of retirement corpus in the later years. There are not many policies that cater to people over 60, which limits the available options. The Insurance Regulatory and Development Authority of India has mandated that all insurance companies must have a maximum entry age of at least 65 for health insurance policies. It has also ordered that no insurer can refuse to cover an older person or charge him extra premium without a valid premium.

Insurance premiums are based on the risks involved and the risk of costly medical care rises exponentially after 60 years of age. Buying a policy at an advanced age will mean higher premiums, lower coverage and a bunch of medical tests. Comprehensive research should be done before choosing a policy and a few things should be kept in mind.

a) Claim Settlement Ratio

It is the percentage of claims honoured against the total number of claims received by an insurance company. Though a low CSR doesn’t mean the company deliberately rejects genuine claims, a higher CSR is always desirable.

b) Sub-Limits

Insurance for older people works in a slightly different way than normal policies. Health cover for older people comes with sub-limits for specific diseases. It means that an insurer will not cover the entire cost in case of specific diseases, and only the predetermined amount will be disbursed. The sub-limits of different policies should be compared before purchasing one.

c) Co-payment Clause

An important thing to consider while taking a health policy is the co-payment clause. To reduce their risk, insurers ask you to bear a part of medical expenses through out-of-pocket payments. Usually, it is around 10-20 per cent, but some insurers demand 40 per cent payment. The co-payment percentage is specified in the policy document. Future Varishta Bima offers an option to completely waive off the co-payment clause on payment of additional premium.

2) Life Insurance

Even though health insurance is the primary requirement at an advanced age, some people need life insurance as well. The concept of having life insurance is to protect the family from financial hardships in case of an untimely demise of the earning member. If people do not work after 60 years of age then what is the need of having life insurance. Some people have children or grandchildren dependent on them, while some work even after retirement. Then there are spouses who rely on their husband’s pension, which makes having life cover important. It goes without saying that buying a life insurance policy becomes prohibitively expensive after 60 years. There is a paucity of options for life cover for senior citizens and so choosing a suitable policy becomes difficult. The premiums may differ depending on the health, age and medical record of the person. A thorough analysis of pros, cons and cost-benefit should be done before buying life insurance.